Explore how risk management can transform from a regulatory burden to a powerful growth strategy in the life sciences industry. Learn key approaches and success stories.
The idea that risk management could be a key strategy for growth rather than simply mitigation. We neglected the power of risk.
Introduction
With the constantly evolving life sciences industry, a focus on innovation and regulatory compliance do not necessarily go hand in hand. One of the challenges this industry has to face is to manage this balancing act between being innovative and creative with their offerings while maintaining high standards in quality and regulation.
To many, risk management can appear to be an unavoidable brake — a toolkit of constraints that dull the cutting edge of innovation. But what if risk management was positioned as growth enabler rather than barrier?
This article discusses the evolutionary capability of risk management in the life sciences field and how it helps to serve as an engine for innovation and business growth.
Perception of risk management in general
Historically, risk management has been considered to be a tool employed to reduce potential hazards that could otherwise lead life science enterprises away from the path paved by regulatory bodies.. Compliance is critical, of course, but this narrow focus needs to be expanded to regard risk management as much more than a shield against potential peril.
The risk we are still not able to see
Endless Effort to Innovate for Pharma, Biotech and Device Companies. From research and development to clinical trials, to investing in the latest cutting-edge technologies, companies spend millions of dollars creating innovative products. Yet, the chase for innovation is a risky game. Clinical trials can be a long, expensive process with failure after failure, and with regulatory hurdles that are often daunting especially in the field of medical care where efficacy is difficult to prove. While these are all real and serious risks, they could also be interpreted as opportunities.
Risk Management: Not about Something Holding You Back, but a Tool of Growth
1. Planning and Decision Making in Business
The true implementation of risk management lies in having a strong awareness of the risks that one takes while investing in such life science venture. Through early risk identification and assessment, companies can best allocate resources and focus efforts, resulting in an informed approach to decisions on which technologies to pursue as well as market entry strategies. Instead of looking at risk as a block, it could instead be used to choose the opportunities which serve to make the greatest rewards.
2. Adaptive Innovation
Innovation is the lifeblood of the life sciences industry. But innovation typically calls for an ability to move and adapt and deal allotments from unanticipated hazards. Risk management as a growth strategy allows these companies to pivot their innovation strategies on-the-fly, keeping them agile and responsive in an evolving landscape.
3. Globalization And Market Expansion
In addition, going into new markets and venturing abroad can bring regulatory complexities and market-specific risks that can render even conservative executives averse to major acquisitions. Companies that have a proactive risk management strategy in place can better navigate these challenges, with the reward being poised to capitalize on global growth. Risk is inevitable but risk management and anticipation should be a stepping stone to the international journey not a barricade.
4. Product Lifecycle Management
In the life sciences industry, the life cycle of a product is typically long, comprised of multiple stages. It is critical to establish an acceptable risk management practice so that products stay in the market, both compliant and competitive. Through the identification and mitigation of such risks, businesses can appropriately address new regulatory requirements, market dynamics as they evolve and prevent disruption from new technologies increasing the velocity of their products through its lifecycle to prolong returns and profitability.
5. Resource Optimization
Growth: A Crucial Part of Life Sciences Resource Allocation. The use of risk management strategies enables companies to better utilize allocation of resources, investing in areas with the greatest prospects for return. This in turn multiplies the power of the consolidated database and allows optimal resource utilisation to bring about strategic growth.
Using Risk Management as an Expansion Strategy
Treating risk management as an integral element of the new era mechanism for growth involves a change in mentality and organized devices. Below are some of the top things to consider for life science ventures looking at taking on more risk.
1. Comprehensive Risk Assessment
Evaluate the risks from regulatory compliance to market competition.Establish processes that consistently classify risks according to a set of criteria and link them together, so everyone is speaking the same risk language from the board room down to the line managers.
2. How it all ties back to strategic planning
Embed risk management in your strategic planning. Identify possible risk scenarios related to long-term goals and objectives, prioritize risks, plan your response to these disruptions.
3. Cross-functional cooperation
Foster department-to-department support among R&D, regulatory affairs, quality assurance and marketing. Cross-functional teams provide risk deep insight and facilitate proactiveness through differing perspectives.
4. Ongoing Monitoring and Review
These criteria can be tracked to ensure historical performance is continually monitored. Evaluate risk mitigants and be prepared to adjust them in reaction to circumstances.
5. Regulatory Expertise
Create on-site regulatory expertise or find a good consultant. Keeping up with the changing regulatory demands is essential for effectively reducing compliance risks.
Success Stories of Risk-Driven Growth – Case Studies
Unique Clinical Trial Desig
Faced with a world where traditional clinical trial models were expensive and demoralizing, one biotechnology company took note. Their innovative adaptive clinical trial design enabled them to respond rapidly to emerging data, through a risk-driven perspective. This not only lowered trial costs, but also shortened the time-to-market for their innovative therapy.
Worldwide Expansion with Compliance Insight
One of our clients, a pharmaceutical company looking to expand into emerging markets was coming up against a maze of regulatory challenges. Instead of doing it themselves, they decided to work with a regulatory consulting firm and addressed probable problems at the regulatory level in advance which helped them receive faster time to market. They are now a truly global company with a wide-ranging product portfolio.
Lifecycle Management for Ongoing Growth
Risk Management: A medical device manufacturer used risk management to increase the lifespan of their flagship product. In doing so, they forecasted movement in both regulation and technology, improving their product where necessary ahead of the curve to keep it competitive and lucrative over time.
Conclusion
Risk management in the life sciences industry is understood more as a ‘devil you must live with than as an opportunity. Yet, by reimagining risk management as a growth strategy instead of a necessary evil, companies can unlock new forms of value.
Risk management becomes an invaluable asset for making educated decisions, implementing responsive innovations, going global and ensuring your product stands the test of time. The industry will continue to change rapidly, and those organizations that can turn risk management from a guard dog into an enabler of growth will be the ones to come out on top in this competitive, dynamic environment.
You see, it is not about eliminating risk altogether; it is all about utilizing them in the best possible way to derive strategic benefit.
Reach out to BioBoston Consulting today or go online to find out how we can help your organization.
